Dow Sings on Upbeat Data, Bernanke

NEW YORK ( TheStreet) -- Major U.S. stock averages rebounded Tuesday from the prior session's swoon after a raft of upbeat economic data and earnings reports, and after Federal Reserve Chairman Ben Bernanke indicated continued support for monetary easing in his semi-annual testimony before Congress.

The Dow Jones Industrial Average gained 116 points, or 0.84%, at 13,900. The blue-chip index has bounced back from Monday's sharp fall, when it suffered its largest one-day point and percentage declines since Nov. 7, 2012.

Home Depot, the biggest home-improvement retailer, posted fourth-quarter earnings Tuesday of 67 cents a share on revenue of $18.2 billion; analysts were looking for earnings of 64 cents a share on revenue of $17.69 billion. Comparable-store sales increased 7% in the quarter. The company also said it increased its quarterly dividend by 34%. Shares gained 5.8%, also getting a boost amid encouraging housing market reports Tuesday.

Homebuilder stocks were also jumping after the housing market reports. PulteGroup(PHM) closed up 5.7% and Toll Brothers (TOL) added 3.3%.

JPMorgan Chase plans to cut 4,000 jobs in 2013 as it seeks to reduce $1 billion in expenses, according to a presentation to investors posted on the bank's Web site. Shares closed down 0.21%.

The S&P 500 climbed 9 points, or 0.61%, at 1,497. The Nasdaq finished ahead by 13 points, or 0.43%, at 3,130.

All sectors in the broad market were in the green, spearheaded by gains in capital goods, conglomerates and consumer cyclical stocks.

Volumes totaled 3.87 billion shares on the New York Stock Exchange and 1.83 billion shares on the Nasdaq. Advancers were outweighing decliners by a 2-to-1 ratio on the Big Board and by a 1.5-to-1 ratio on the Nasdaq.

Major U.S. stock averages each fell more than 1% Monday and the VIX fear gauge spiked as investors feared that the latest updates from Italy's elections were portending the risk that the country could backpedal from its austerity programs.

"The week failed to get off to a strong start, as the Dow Jones continued to battle with the round-number 14,000 area," said Joe Bell, senior equity analyst with Schaeffer's Investment Research. "After such a strong rally this year, these round number areas often act as logical levels for investors to take profits."

A pre-published copy of Bernanke's semi-annual testimony before the Senate Banking Committee in Washington indicated that the Fed chairman continues to have an accommodative view on monetary policy. He said that although a long period of low rates could encourage excessive risk-taking, to this point "we do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery and more rapid job creation."